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1?. To eliminate an Aggregate Expenditure shortfall of $100 billion when the economy has an MPC of 0.50, the government should increase spending by A. $200 billion. B. $100 billion. C. $50 billion. D. $500 billion. 19. Which of the following explains why the government should not increase spending by the entire amount of the AB shortfall to move the economy to full employment? A. Price level changes will make up for the difference between the scal stimulus and the AE shortfall. B. The multiplier process will contribute to an additional increase in aggregate demand that will cause an inationary gap. C. The government can increase taxes to create an additional increase in aggregate expenditure. D. The price level is constant. 20. A tax out has a smaller impact on aggregate expenditures than an increase in government purchases of the same size because A. A portion of the tax cut is invested. B. A portion of the tax cut is saved. C. Tax cuts do not increase disposable income. D. The tax cut multiplier is equal to 1. 22. Fiscal restraint is defined as A. Tax hikes or spending cuts intended to reduce aggregate expenditures. B. Tax hikes or spending cuts intended to increase aggregate expenditures. C. Tax cuts or spending hikes intended to increase aggregate expenditures. D. Tax cuts or spending hikes intended to reduce aggregate expenditures.23. Which of the following is a policy option to eliminate an AB shortfall? A. Decrease government purchases. B. Reduce taxes. C. Reduce transfer payments. D. All of the choices are correct